All Eyes On 'Merkozy' As Leaders Try To Save Euro

French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris today (Dec. 5, 2011).

Lionel Bonaventure AFP/Getty Images

While The New York Times says German Chancellor Angela Merkel and French President Nicolas Sarkozy are working on a deal to save the euro that has "several moving parts," The Financial Times cautions that "officials on both sides have cautioned against expectations of an announcement of a detailed plan by the two."

The FT adds that Merkozy (headline writers' new favorite name for the two leaders) "may be the driving force in the 17-strong currency union, but the two are (more or less) sensitive to concerns among other members that they should not be dictated to by the big powers."

Still, the Times says the deal, "as European and American officials describe it, is being negotiated along four main lines":

-- "New promises of fiscal discipline."

-- A larger bailout fund.

-- More money from the International Monetary Fund "to augment the bailout fund."

-- "Quiet political cover for the European Central Bank to keep buying Italian and Spanish bonds aggressively in the interim."

On the NPR Newscast this morning, Planet Money's Zoe Chace said there's also talk about something akin to "a whole new European Union" with "more centralized control over individual country's budget" in order to prevent the kind of cascading crises that have plagued the union this year.

On Morning Edition, Eleanor Beardsley reported from Paris about how "Merkozy" have been preparing their nations for major changes in the EU.

Merkel and Sarkozy are meeting today in Paris. There's an EU emergency summit in Brussels on Friday.

Update at 1:45 p.m. ET. More Talks, Treaty By March?

The BBC reports that as he and Merkel called for "a new treaty to deal with the eurozone debt crisis," Sarkozy said talks on any such new treaty need to be completed by March.

According to the BBC, the two leaders also said "they wanted treaty changes to be implemented by all 27 EU member states, but if that was not possible, just the 17 states which have adopted the euro."

Bloomberg News says that "Merkel and Sarkozy presented a common platform for a Dec. 8-9 summit of EU leaders in Brussels. Merkel's government won't stand in the way of Bundesbank help to fight the debt crisis by means of loans channeled through the International Monetary Fund, a senior Merkel ally said."

"The leaders of France and Germany called forcefully Monday for a new European Union treaty that would automatically punish countries that use the euro if they violate existing limits on overspending. Stocks and the euro rose while European government bond yields dropped sharply as investors viewed the proposal for a closer fiscal union among the 17 countries as an important step to save the euro."

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